The Hong Kong Trade Development Council’s (HKTDC) 1Q25 Export Confidence Index reveals that Hong Kong’s exporters remain optimistic despite escalating trade tensions between the United States and its key trading partners. This confidence is driven by strong improvements across key indicators, including sales, new orders, procurement activity, and sales prices.
Both the Current Performance Index (52.1) and the Expectation Index (51.0) have seen positive increases and remain well above the neutral 50-point mark, reflecting a robust outlook for the sector.
The Current Performance Index rose by 1.8 points, supported by significant gains in the Sales and New Orders Sub-Index (56.2, up 2.9) and the Procurement Sub-Index (58.1, up 5.9). The Trade Value Sub-Index remained in expansionary territory at 54.9, despite a slight dip of 0.2 points. However, cost pressures (28.5, down 4.3) continue to pose a challenge to exporter sentiment.
The Expectation Index saw a modest increase of 1.0 point, reaching 51.0. Key sub-indices, including Sales and New Orders (53.8, up 1.0), Trade Value (53.9, up 1.3), and Procurement (53.8, up 2.7), all posted positive results. In contrast, the Cost Sub-Index saw a slight decline of 0.4 points, dropping to 34.4.
When examining Hong Kong’s primary export markets, sentiment was most favorable toward Mainland China and the ASEAN region. Mainland China emerged as the most promising market, with both its Current Performance (59.0) and Expectation (55.7) scores outperforming other regions. The ASEAN bloc also displayed strong growth, with Current Performance at 56.4 and Expectation at 53.0, both firmly in expansionary territory.
In contrast, the ongoing tariff hikes have dampened confidence in the US market, where the Current Performance Index (47.8, down 3.1) fell below 50 for the first time in a year, while the Expectation Index dropped to a one-year low of 46.7.
Sector-wise, the jewelry (53.1), electronics (52.3), and timepieces (51.2) industries showed the strongest Current Performance scores. Looking ahead, five out of six sectors reported an optimistic outlook, with jewelry (54.4), equipment/materials (52.6), and timepieces (51.1) leading in terms of expectations. Even sectors such as toys (50.7) and electronics (50.6) remained in expansionary territory, indicating a broad-based confidence across industries.
Another noteworthy finding is that exporters remain resolute in their approach to combating ongoing cost pressures. The Trade Value Expectation Sub-Index stayed well above 50 in almost every sector, signaling a widespread expectation of price increases as a necessary strategy.
In addition to the standard index data, the 1Q25 survey also explored thematic issues impacting exporters. Notably, in response to the latest round of US tariff hikes, the majority of traders (46.8%) favored diversifying sourcing as the most effective strategy, followed by expansion into new markets (39.7%).
The survey also revealed a positive outlook for profit margins, with 75.4% of respondents expecting their profit margins to either increase or remain stable—up from 72.1% in 4Q24 and the highest figure in the past year.
Overall, the findings underscore Hong Kong’s export sector’s resilience and adaptability in the face of global trade challenges, with a generally optimistic outlook for the months ahead.
